Kevin Sneader visits India, reflects on outlook in the current global climate
According to management consultancy McKinsey & Company’s new global boss Kevin Sneader, executives in India and around the world need to take a cautious yet flexible approach when dealing with the imminent trade war between the US and China, given that the months to come could bring an economic boom as much as a crisis.
Kevin Sneader has only been in office as Global Managing Partner at McKinsey & Company since the 1st of July, and he already has a global trade war to contend with, involving an area of particular expertise for him, in addition to the flurry of scandals that the firm has found itself embroiled in.
Sneader has been with McKinsey for nearly three decades now, having worked for the firm’s offices across the globe, from London and Paris to Beijing and Hong Kong. Most recently, Sneader was Chairman of the firm’s Asia operations – a familiarity that has manifested itself in his choice of India as his first overseas visit at the helm of the firm.
“I wanted to be in Asia and I wanted to be somewhere that matters to the world in terms of size and importance. I have been coming to India regularly. This opportunity was to find out what’s happening in India,” says Sneader of his visit to the country.
His comments during his visit dealt largely with a global phenomenon that has one of its focal points very close to home, i.e. the increasingly hostile trade relations between the US and China. According to Sneader, the previously escalated tariff-levels were not much of a concern, until the declaration of tariffs on $200 billion of China’s exports, which represents nearly half of its exports to the US.
The announcement reinforced the possibility of a trade war, according to Sneader, but he recommends a flexible strategy for Indian businesses to deal with it. All CEOs have to plan for different economic environments. We are in an unprecedented period of synchronous growth; the whole world is growing. IMF had a forecast of 3.5% growth in January, revised to 3.7% in April,” he said.
He added, “We were seeing that steady uptick but our surveys show that sentiment has started to flatten. It's not bad, it's just more cautious. I think everyone should be prepared for all eventualities. Because the other side of this, of course, is that if the unexpected happens – trade war clouds disappear – that will give a big boost to the global economy. You (companies) should be prepared for that too.”
Barring the challenges posed by such a scenario, Sneader is optimistic about India’s overall economic outlook. The country’s GDP is growing at unprecedented rates, and the economy appears to have recovered from the minor setbacks that it suffered due to the disruptive implementations of demonetisation and the Goods & Services Tax (GST).
